We are hiring, will do so more: Infosys

Deepshikha Monga & Shelley Singh, ET BureauNov 21, 2008, 10.00am IST

NEW DELHI: The global meltdown is posing several challenges for IT companies. Apart from worrying about the wild currency fluctuations, IT players have to cope with uncertainties in new contracts, customers cutting back IT investments and an overall sluggish market scenario.

Despite the challenges, Infosys Technologies MD & CEOS Gopalakrishnanbelieves that there is no need to cut manpower and there are several untapped opportunities that Infosys can look at for future growth.ETcaught up with him to discuss the slowdown, Infosys strategy, new areas that Infosys is betting on and more. Excerpts:

What impact are you seeing of the current economic slowdown on outsourcing?

The US bailout of AIG, the Lehman bankruptcy and related developments have had an overall negative impact and this will be prolonged before we see any recovery.

In a recent informal survey among our customers, we found there will be an increase in allocation for offshore work in some cases. We are hiring and will do so more, both onsite and offshore. We believe that due to the skills available, India will be a preferred offshore location.

What are the opportunities you're exploring now?

The business which is done under the global delivery model (GDM) is a very small part of the overall IT spending. The overall IT services spending is about $800 billion. Outsourcing is about $250 billion. The exports from India are about $40 billion or 5%. Also, it includes captives so the third-party number is much lower.

So, what we are telling our clients is that they can get much more savings from transitioning to GDM. About 90% of our revenue comes from the US and Europe. Even in Europe, we are present in the UK, Germany, Switzerland, the Netherlands and France. There are places we are not present in. There are sectors we don't do much work in, public sector, government and healthcare. Those are all opportunities where we can look for growth in the future.

Before the current crisis, there was a focus on moving beyond cost-cutting to high-end work. Is the focus is back on cost-cutting?

Actually, consulting is growing very well and that is high-end. We have limited capabilities in consulting but we are seeing increased opportunities. Companies are looking at consultants to tell them how to optimise their costs, increase their revenues, what kind of restructuring should they do. There is a lot of M&A and integration work.

Which are the areas in R&D that you're particularly focussing on?

We are investing in IP solutions. With our own R&D, we are able to do more value-added services. So, we will continue to invest in R&D, even in such times. It's also a good way to utilise the bench. We are investing in R&D in every sector that we are present in, BFSI, manufacturing, retail, telecom.